Mid Cap Stocks Shine on a Positive Day

Markets opened with a slight negative bias in line with the other Asian markets but gained momentum as the day progressed. Early in the session Nifty moved above 5425 and remained above that for the remaining part of the session. It was a combined strength of many heavyweights that propelled Nifty to higher levels. So, we had positive momentum in RIL, Bharti, SBI, ICICI Bank, IDFC and Bhel that sustained throughout the session. Bank Nifty gained around 1.7% and even the Realty counters had a positive day. But the main activity was confined to some mid cap stocks like HOEC, DCHL, Tata Comm and BGR Energy. Some other prominent gainers were IB Real, Pantaloon, MLL, Sesa Goa, Cipla, Hexaware, Indusind Bank, Havells, JP Associates, PFC, Orchid and REC.  Few stocks did witness some selling and prominent amongst these were Escorts, TV18, NCC, ZEE, Jet Airways, HPCL and Neyvelli. Volumes were better particularly in the top gaining counters.

As suggested yesterday Nifty did move up steadily once it was above the immediate resistance at 5425 and closed almost at the highest point of the day. This suggests that the 5350-75 support has held for now and we are once again in the sideways range between 5375 and 5570. Bank Nifty has once again led the way and it is approaching breakout level of 11200 again. Bank Nifty has seen strong base building/consolidation for past 10 weeks now and a sustained breakout beyond 11200 could mean another 10-12% up move. ICICI bank closed just around 1040 and followup buying could see it move to around 1075-1080. Indusind Bank is looking good and seem to have formed a decent base. Stock could be headed towards 275-280. BGR energy is another counter that is showing positive intent and has once again moved past 465. Stock could target Rs 510 if it manages to stay above 450. Gail, Petronet and DLF are also looking good for decent gains over next 5-7 trading sessions. 

Nifty would find decent support around 5415-25 now and then around 5375 while 5530-5550 should provide resistance as of now.

Markets on 25 Nov 10 - Midcap Stocks Have No Takers

Markets opened on a slightly positive note, rallied a bit, managed to remain steady till afternoon but later it gave way as the selling pressure of the expiry day was very heavy. Among the banking stocks PNB , Axis Bank and Bank of India were the big losers. LIC Housing Finance which was the big loser yesterday opened on a negative note and made a low of Rs.945 but managed to buck the trend and rallied smartly to an intraday high of Rs.1113.50 and finally closed at Rs.1053.80 with very minor losses. Infosys, HDFC Bank, Bajaj Auto, TCS, Hero Honda and HDFC were the major gainers and it was primarily Infosys and Bharti which helped the index close around 5800 levels. 
 

The biggest casualty was in the midcap stocks where there were no buyers and as a result the breadth was extremely poor. We are of the view that the corporate loan scandal to a very large extent has been discounted as market feels that this is not a systematic failure. The massive fall in the market to a very large extent can be attributed to the expiry of the derivative segment where rollover did not take place because of lack of confidence in the uptrend.

 

Other stocks which managed to buck the trend were Lupin, Indusind Bank, Bata India, Ultratech Cement, ACC and GE Shipping. These are the stocks which should be bought if the market remains steady tomorrow.

Nifty will face strong support at 5785 and 5750 and will face strong resistance around 5840 and 5885 levels.